Nashville, Chattanooga & St. Louis Railway v. Browning

Background

A large interstate railroad challenged Tennessee’s tax assessment of its property. Tennessee law required the Railroad and Public Utilities Commission to value the railroad’s entire system, deduct localized property, and apportion the remainder to Tennessee by the ratio of miles in the State. The Commission valued the system and calculated $12,925,944 as the Tennessee share. The railroad appealed through state courts; the State Board of Equalization and the Tennessee Supreme Court upheld the assessment, and the railroad then asked this Court to review federal constitutional claims.

Reasoning

The Court considered three constitutional complaints: that the mileage apportionment unlawfully burdened interstate commerce, that Tennessee’s longstanding practice discriminated against railroads in violation of equal protection, and that the valuation was so excessive it violated due process. The Court said mileage apportionment is a familiar, accepted method and found no special circumstances here to displace it. The evidence of systematic underassessment of local property did not prove unconstitutional discrimination against the railroad class. And because railroad valuation is inherently imprecise, any claimed over-assessment did not by itself show a constitutional deprivation.

Real world impact

The decision affirms that states may use mileage-based formulas to apportion value for interstate carriers and that long-standing state assessment practices can be upheld if not shown to be invidious. It makes overturning a state valuation on Commerce or Fourteenth Amendment grounds difficult absent clear special facts. The state’s assessed tax may therefore stand and be collected.

Dissents or concurrances

The Tennessee Supreme Court had two separate dissents below, noted by the Court, but their views were not adopted here.